The impact of R&D subsidy on innovation: evidence from New Zealand firms

Trinh Le and Adam Jaffe

Economics of Innovation and New Technology, 2017, vol. 26, issue 5, 429-452

Abstract: This study examines the impact of government subsidy through R&D grants on innovation output for firms in New Zealand. Using a large database that links administrative and tax data with survey data, we find that R&D grants have a stronger effect on more novel innovation (e.g. applying for a patent or introducing new products to the world) than on incremental innovation (e.g. any product innovation) and that larger, project-based grants are more effective at promoting innovation than smaller, non-project-specific grants. There is little evidence that R&D grants have differential effects between smaller (<50 employees) and larger firms.

Date: 2017
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DOI: 10.1080/10438599.2016.1213504

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